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LONDON, DUBLIN and BRUSSELS — Meet the new Brexit row, same as the old Brexit row.
Britain and the European Union are once again heading for a standoff over post-Brexit trading rules governed by the Northern Ireland protocol. Here’s everything you need to know about how we got here — and what might be coming next.
What are they fighting about this time?
After more than a year of talks with the EU, the U.K. is threatening to go it alone and fix disputed parts of a post-Brexit deal governing trade across the Irish Sea, known as the Northern Ireland protocol.
A promise of domestic U.K. legislation granting ministers the power to ignore parts of the protocol is expected Tuesday — and will very likely trigger fresh anger in Brussels and Washington.
Sorry, what’s the Northern Ireland protocol again?
Agreed as part of the Brexit Withdrawal Agreement in 2019, the protocol was drawn up to protect the EU’s single market after Britain exited in January 2021.
Both U.K. and EU negotiators agreed that it would be too difficult on economic and security grounds to enforce EU trade rules on the land border between Northern Ireland, part of the U.K., and the Republic of Ireland, an EU member.
Instead, the EU’s customs and sanitary controls would be applied on British goods as they arrived at ports in Northern Ireland, which would remain part of the EU’s single market for goods.
The arrangement offered two big advantages: Checks would overwhelmingly be in one direction only, whereas enforcement on the Irish border would have required checks on shipments in both directions; and Northern Ireland producers would gain a unique ability to export barrier-free both to the U.K. and the EU, a potential sales point for inward investment.
So what’s not to like?
Plenty, if you’re a hard-line unionist committed to maintaining Northern Ireland’s place in the U.K. and hostile to closer relations with the Irish Republic.
Creating controls on goods arriving from Britain, while keeping such trade to and from the south of Ireland barrier-free, was always going to unsettle unionists sensing that the protocol was tilting the balance of business toward Irish unity and away from the U.K. “mainland.” Irish nationalists, who overwhelmingly opposed Brexit, accepted the protocol for much the same reason.
It didn’t help that protocol enforcement got off to a terrible start. U.K. authorities, flirting with the risk of a no-deal Brexit until a Christmas Eve deal, barely announced new post-Brexit rules in time for New Year’s Eve. Shippers in England faced months of confusion trying to figure out the new paperwork and disjointed IT systems, spurring many to dump Northern Irish clients as not worth the hassle.
Didn’t UK authorities tackle protocol problems?
While IT systems and training improved, political oversight sabotaged efforts. The main pro-British party, the Democratic Unionists, launched a campaign to undermine port controls, using their positions in Northern Ireland’s government to block the building of permanent border posts and the hiring of needed inspectors and vets.
Faced with rising threats of unionist street violence, the U.K. in March 2021 unilaterally postponed the introduction of additional checks and restrictions and has kept extending such “grace periods,” with the EU’s reluctant acquiescence, for the past year.
This means the protocol’s rules today are more honored in the breach than the observance.
Weren’t EU-UK talks meant to resolve all this?
Yep, and to be fair both sides have tried putting forward ideas to make the set-up work better.
The U.K. published its blueprint for change in July 2021, and the European Commission’s own package followed in October — but the gap is still substantial.
Many of Britain’s proposed changes fall outside the scope of the mandate for talks that EU leaders gave Maroš Šefčovič, the Commission’s Brexit point-man — so the U.K. has repeatedly called for that to be expanded. There’s no appetite for that in the bloc.
The Commission acknowledges the way the protocol currently works is causing some problems, but believes these can still be fixed if the U.K. shows political will. Brussels is refusing to change the text of the deal so soon after it became international law — while the U.K. argues that the EU’s proposals look a lot better on paper than in reality.
Britain has also floated some new reasons to justify changes to the protocol in recent weeks, saying Northern Ireland must be able to benefit from the same tax breaks the government can offer to other U.K. citizens amid a cost of living squeeze.
So what’s the UK’s big idea?
We’ll find out Tuesday. Foreign Secretary Liz Truss will flesh out the government’s latest plan in a House of Commons statement. She’s set to promise domestic legislation granting ministers the power to override parts of the protocol — but the bill itself looks unlikely to be introduced in parliament until later this spring and could take up to a year to become law.
The U.K. hopes its strategy will buy more time to shift the dial with Brussels and ultimately prevent it having to follow through on action that could trigger a trade war and a backlash from Washington. “It’s a typical Johnsonian having cake and eating it moment,” one EU official said.
What about Article 16?
Brussels has for weeks wondered whether the U.K. will also trigger Article 16, the deal’s safeguard mechanism envisaged for situations where one of the two sides feel the provisions are causing problems, but this now looks unlikely.
Trade consultant and former U.K. Brexit adviser Shanker Singham said Article 16 has become “a bit of a canard” and he does not expect U.K. ministers to trigger it. “It’s not a process that was designed ever to be used, because it is a very cumbersome process,” he said.
How’s the EU likely to react?
The EU is keeping its cards close to its chest as it projects unity. But EU diplomats warn the bloc won’t hesitate to take swift countermeasures if Westminster actually decides to follow through with its plan. “They’re playing with fire,” one EU diplomat said of the U.K. “And you don’t have to be surprised if you get burned in the fire.”
Perhaps the most straightforward scenario would be legal action. The Brexit deal gives the Commission and the Court of Justice of the EU the power to launch an infringement procedure for violations of EU law in Northern Ireland. However, Brussels could sue London only once the law is actually in force so that process could take months.
A more radical option would be to scrap the entire post-Brexit deal smoothing trade between the U.K. and the EU — but appetite for that one is pretty low in Brussels. “There’s not much appetite to have another navel-gazing fight with the U.K. over something that is mainly driven by domestic politics rather than by actually trying to find solutions,” one diplomat said.
Asked whether it had prepared different scenarios, Commission spokesperson Arianna Podesta said: “Our appeal to the U.K. side to sit down with us and engage on the flexibilities the EU set out in October remains valid, as this would be a better course of action than unilateral action.”
The issue hasn’t been formally discussed among EU countries and the Commission, several diplomats told POLITICO — but that doesn’t mean it’s not being talked about in the corridors of power.
Will EU unity hold?
Maybe. But a diplomat from an EU country said they recognize the Ukraine war has made it harder for EU countries to come up with a coordinated response, in part because the bloc wants to maintain a good working relationship with Britain over the conflict. A trade war with a close neighbor wouldn’t exactly ease the soaring cost of living either.
However, two other diplomats warned it would be a miscalculation for the U.K. to bank on a softer response because of the war.
What about UK unity?
Although no U.K. minister has publicly criticized the British plan to go solo, it’s been widely reported that some Cabinet players harbor misgivings.
A person familiar with the discussions said U.K. Chancellor Rishi Sunak has concerns about worse ties with the EU and trade blowback, while Housing Secretary Michael Gove would rather allow talks to continue for a bit longer. There is cross-Cabinet consensus, however, on the need for changes, a second U.K. official said.
One final twist: a senior ally of Johnson’s told the Sunday Times this weekend that the prime minister “does not want a war with the EU” and that there’s concern Truss and others are being too gung-ho.
What’s Washington saying about all of this?
Irish-supporting Democrats — not to mention businesses — in the U.S. aren’t exactly beaming at the prospect of a unilateral British move.
Garrett Workman, a senior director of European Affairs at the U.S.-U.K. Business Council, thinks a Biden administration response could get serious, and go further than just canceling new trade dialogues London and Washington struck up in the last few months. “Just cutting off these nascent trade dialogues doesn’t really seem to move the needle. So there might be pressure to do more than that.”
Democratic Congressman Bill Keating, chairman of the subcommittee on Europe, energy, the environment and cyber, told POLITICO Monday that if the U.K. follows through on its plan for legislation it would “result in a potential free trade agreement with the U.S. going nowhere” and be a “step backward in terms of trade relations.” Buckle up.
Emilio Casalicchio contributed reporting
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